Vermont Fights Ruling It Can’t Shut Entergy Nuclear Plant

Entergy Corp. (ETR) and Vermont brought
their dispute over whether the state has the authority to shut
its only nuclear power plant before an appeals court.

Lawyers for Entergy, the operator of the Vermont Yankee
plant, told a three-judge panel of the U.S. Court of Appeals in
New York today that a district judge was correct in ruling that
the decision to close a reactor for safety reasons belongs to
the federal government and not the state.

The purpose behind a law allowing Vermont to deny a license
renewal was safety, which falls under the exclusive jurisdiction
of U.S. regulators, Kathleen Sullivan, an attorney for Entergy,
told the panel. The reasons Vermont gave for its efforts to shut
down the plant, including economic concerns, a desire to promote
renewable energy and prevent pollution, aren’t plausible, she
said.

“If safety is the primary purpose, we win,” said
Sullivan, an attorney at Quinn Emanuel Urquhart & Sullivan LLP.

U.S. District Judge Garvan Murtha in Brattleboro, Vermont,
ruled in January 2012 that state legislators lacked the
authority to deny Entergy a license to operate the reactor after
March 2012.

“Entergy way overstates the notion that states can’t be
involved in any safety matters,” David Frederick argued on
behalf of Vermont. He said if Entergy were to go bankrupt, the
state could be stuck dealing with the plant’s nuclear waste.

State Problem

“The state is going to be left holding the bag for that,”
said Frederick, of Kellogg, Huber, Hansen, Todd, Evans & Figel
PLLC.

Entergy sued Vermont Governor Peter Shumlin, state Attorney
General William Sorrell and members of Vermont’s Public Service
Board in April 2011, arguing the state couldn’t overrule the
U.S. Nuclear Regulatory Commission, which renewed Entergy’s
license to operate the power station until 2032. The federal
Atomic Energy Act pre-empted the state action, the New Orleans-
based company said in the lawsuit.

Vermont “attempts to thwart the federal statutory scheme
that places the radiological safety of nuclear power generation
exclusively in the hands of the federal government,” Entergy
said in its brief to the appeals court.

Health Risks

Nuclear plants can present public health risks that aren’t
related to the radiation hazards within the federal government’s
exclusive jurisdiction, Vermont said in its brief to the appeals
court.

“The states, not the NRC, ultimately decide whether a
nuclear plant will continue to operate,” the state said.

Non-radiological health issues include stormwater runoff,
thermal discharges to rivers and the potential release of diesel
fuel and other pollutants, according to the state.

Vermont’s attorney general ordered more oversight of the
plant in 2010 after the discovery of the radioactive hydrogen
isotope tritium in monitoring wells, according to court papers.

Entergy said in court filings that it undertook “extensive
remediation” to remove the soil and water containing the
chemical.

This month, Vermont’s attorney general called on the
Nuclear Regulatory Commission to conduct an environmental review
of the storage of spent nuclear fuel onsite at nuclear power
plants.

Not Participating

“The Nuclear Regulatory Commission is not a participant in
that case,” Scott Burnell, the agency’s spokesman, said of the
Vermont lawsuit. “That is a matter between the state and the
company.”

Entergy also contends federal law pre-empts Vermont from
requiring the company to sell power to state utilities at below-
market prices to remain open. The district judge agreed and
prevented the state from doing so.

“Conditioning continued operation on the existence of a
below-market power-purchase agreement would be prohibited under
the commerce clause” of the U.S. Constitution, Murtha said in
his opinion.

The state said in its brief that the court’s injunction on
a purchase agreement “cannot stand” because the Vermont Public
Service Board had taken no such action.

“There is no evidence or finding that the board has issued
or contemplated issuing any order or ruling requiring Entergy to
provide below-wholesale-market contracts as a condition of
relicensing,” the state said in its filing.

The Vermont Yankee plant generates about 66 percent of the
power consumed in the state, Entergy said. It employs 625 people
and pays about $15 million a year in state fees and taxes,
according to the company. The plant is in Vernon, on the
Connecticut River in the southeast corner of the state.

The appeals case is Entergy Vermont Yankee v. Shumlin, 12-
00791, U.S. Court of Appeals for the Second Circuit (New York).
The lower court case is Entergy Nuclear Vermont Yankee LLC v.
Shumlin, 1:11-00099, U.S. District Court, District of Vermont
(Brattleboro).